STAFF REPORTER
AS the new school year begins, it’s the perfect time for parents to give their children a financial refresh. With the cost-of-living easing, offering some much-needed breathing room in family budgets, teaching kids the value of saving early on can set them up for a lifetime of healthy financial habits. Simple, age-appropriate activities can make saving fun and practical for the whole family.
According to Deloitte’s latest South African Investment Management Outlook, the national savings rate is a meagre 0.5%. The economic landscape, however, is showing signs of improvement:
Consumer inflation has moderated significantly, falling from 5.5% in November 2023 to 2.8% in November 2024.
Fuel prices have dropped steadily, with petrol now costing R4.21 less per litre than it did in June, and diesel prices down by R3.63 per litre since April.
Two consecutive interest rate cuts in September and November have provided further relief for households.
“With more favourable economic conditions, now is the perfect time to start teaching children the value of saving. By building financial literacy during these calmer times, we can empower kids to develop habits that will serve them well into adulthood, ” said Mariné van Brakel, Deputy CEO at RCS.
Van Brakel recommended using the “D.O.T. approach”, or “do one thing”, to teach children fundamental lessons about saving and financial management.
Here’s how parents can adapt financial lessons to their child’s age group as they head back to school:
3 – 5 years: Save coins in a money box
Money boxes make saving a fun and tangible experience for pre-schoolers. Let them drop the coins into the box, celebrating each addition by shaking it so they can hear the jingle of their progress. This simple, hands-on activity not only introduces the concept of saving but also helps young children build patience and a sense of achievement.
6 – 8 years: Create a visual savings goal chart
Younger school children benefit from seeing their savings journey come to life. Create a colourful savings chart with your child, breaking their goal into manageable steps. Add pictures of what they’re saving for, such as a toy or book, and celebrate each milestone they reach. This visual approach reinforces the idea that small efforts can lead to big rewards.
9 – 11 years: open a savings account
Tweens are ready for their first bank account, which can help them develop independence and responsibility. Walk them through the process of opening an account and explain how interest works to grow their savings over time. Encourage them to deposit money earned from chores, gifts, or allowances to see the value of consistent saving.
12 – 14 years: start simple budgeting
Pre-teens can begin learning how to manage their money by creating a basic budget. Work together to list their income, such as allowance or birthday money, and their expenses, like hobbies or snacks. Use a colourful chart or an app designed for their age to make budgeting an interactive and rewarding experience.
15 – 18 years: understanding credit management
Introducing teenagers to more advanced financial skills can set them up for financial success in adulthood. Start by explaining the basics of how credit works, including credit scores, interest rates, and the importance of building a good credit history.
You can even show them your own credit or account card statements and explain how to read them. Discussing the importance of paying balances in full can set the stage for responsible financial behaviour in adulthood.
For parents who are at this critical teen stage, RCS has the perfect practical tool to use.
“Our partnership with the Welltec Group gives RCS customers’ access to Credit Gateway. This portal provides credit management tools and expert advice on how to manage credit responsibly and develop good financial habits, making it a valuable resource for parents and teens alike, ” concluded van Brakel.